Property Market 2015

jay0109

handlemaster wrote: »

Imagine if prices never increased and the government I. E. The people were left with all that Nama property with no buyers. How much better would the country be? I think the government did the right thing let prices rise sell all the crap and then start looking at cooling prices.

The Govt/NAMA sold most of the properties at rock bottom prices to the Yanks!
And you credit the Govt with superhuman powers they simply don't have...they cannot rapidly increase and then cool prices just like that. They're not that good!

Cuddlesworth

gosplan wrote: »

The repossessions thing is not about protecting the vulnerable.

It's about what 20% of irish houses(or whatever the figure is) coming on the market would do.

If we have indeed bottomed, recovered a bit and now flatlined, it's surely the last issue to resolve.

Not saying I agree or disagree with this approach but I think that's the rationale.

Because we didn't allow the banks to repossess and we are now left with the worst arrears in the world, it's fair to say that we couldn't have bottomed, recovered or flatlined in the true sense. It's a huge factor in the market that will undoubtedly have a huge effect when it's eventually addressed.

Sleepy

beard_grower wrote: »

house prices in limerick are about 30% lower than in galway , they only got off the bottom around fifteen months ago, beit for renting or buying , limerick is still dirt cheap

I'd have thought Limerick being 30% cheaper than Galway would be the norm? In terms of employment, crime rates, culture, amenities etc. Galway would be the more attractive location for most, no?

The_Conductor

Cuddlesworth wrote: »

Because we didn't allow the banks to repossess and we are now left with the worst arrears in the world, it's fair to say that we couldn't have bottomed, recovered or flatlined in the true sense. It's a huge factor in the market that will undoubtedly have a huge effect when it's eventually addressed.

What makes you imagine it'll ever be addressed?
Its been booted down the road so many times at this stage- politically, no-one has the guts to grasp the mettle and deal with it for once and for all.
What I think will happen- is slowly it'll unwind itself- and slowly (over 10-15 years)- it'll lessen in significance. Until then- you and I, and every other taxpayer in the country, is on hock for the lot.

mel123

The_Conductor wrote: »

Have a look at the likes of the Allsop auctions- at the numbers of properties failing to sell- and the prices that are being achieved on the day- auctions like Allsop which shift hundreds of properties over a day or two- are probably as good a barometer of where we truly are at- as are any other measures.

The houses at auction, have they been on the market and couldn't sell, or just go straight to auction to save all the hassle?
Just wondering out of curiosity is all

The_Conductor

mel123 wrote: »

The houses at auction, have they been on the market and couldn't sell, or just go straight to auction to save all the hassle?
Just wondering out of curiosity is all

Mixture- different sellers, different motivations- its a bit everything in there........

Cuddlesworth

The_Conductor wrote: »

What makes you imagine it'll ever be addressed?
Its been booted down the road so many times at this stage- politically, no-one has the guts to grasp the mettle and deal with it for once and for all.
What I think will happen- is slowly it'll unwind itself- and slowly (over 10-15 years)- it'll lessen in significance. Until then- you and I, and every other taxpayer in the country, is on hock for the lot.

Last time I looked, it was still increasing, 7 years later. We will be due another crash before it manages to fizzle itself out at that rate.

handlemaster

jay0109 wrote: »

The Govt/NAMA sold most of the properties at rock bottom prices to the Yanks!
And you credit the Govt with superhuman powers they simply don't have...they cannot rapidly increase and then cool prices just like that. They're not that good!

At the time it was the best prices possible. Its great to look back and say the prices were low but if it werent for these companies that bought then perhaps we still would have low confidence in ireland and prices would be still low with no one still willing to buy.

fliball123

handlemaster wrote: »

At the time it was the best prices possible. Its great to look back and say the prices were low but if it werent for these companies that bought then perhaps we still would have low confidence in ireland and prices would be still low with no one still willing to buy.

has no one done economics 101? supply vs demand ..the demand in this country for houses far outstrips supply and the demand is increasing at a faster rate then the supply needs being met. While this continues prices will continue to rise..Anyone looking for them to drop need a wake up call. Indicators such as rental price and the economy would suggest we are in for at least another 5 maybe 10 years of rising prices

Michael D Not Higgins

fliball123 wrote: »

has no one done economics 101? supply vs demand ..the demand in this country for houses far outstrips supply and the demand is increasing at a faster rate then the supply needs being met. While this continues prices will continue to rise..Anyone looking for them to drop need a wake up call. Indicators such as rental price and the economy would suggest we are in for at least another 5 maybe 10 years of rising prices

Property doesn't exist in isolation and there are a number of factors beyond supply and demand that affect the market.

The_Conductor

fliball123 wrote: »

has no one done economics 101? supply vs demand ..the demand in this country for houses far outstrips supply and the demand is increasing at a faster rate then the supply needs being met. While this continues prices will continue to rise..Anyone looking for them to drop need a wake up call. Indicators such as rental price and the economy would suggest we are in for at least another 5 maybe 10 years of rising prices

Plenty of us have far more experience than Economics 101
The issue is not simply- supply and demand- which no-one can deny there is an excess of demand and a lack of supply. Supply and demand mean nothing- if people can't access finance- or indeed- if one of the major sectors of the market is being hounded out of the market by regulatory and taxation policy- as is the case.

The BTL market- was up to 45% of the entire market, not so long ago- now its not only dried up- but its adding supply to the market- something that would have been wholly inconceivable not so long ago.

BTL investors- aside from regulatory and taxation policy- are treated to harsher treatment when accessing finance- than are other participants in the market (who will in their own right argue that they are being treated to onerous conditions- notably the deposit requirements- but also the approval processes- which are ruling out disproportionately large numbers of purchasers.

Supply meanwhile is being artificially throttled- through a selfsame lack of finance for the construction industry (not to mention artificially high wages etc- which have not come down to reflect new realities).

Its a mess- but its not a mess wholly attributable to supply and demand issues.......

jay0109

handlemaster wrote: »

At the time it was the best prices possible. Its great to look back and say the prices were low but if it werent for these companies that bought then perhaps we still would have low confidence in ireland and prices would be still low with no one still willing to buy.

So high house prices create high confidence in ireland
You'd want to talk to the MNC's about that, and them currently buzzing the ears of Ministers about the cost of accomm and the shortage of same for their workers

fliball123

Michael D Not Higgins wrote: »

Property doesn't exist in isolation and there are a number of factors beyond supply and demand that affect the market.

This is true but is the main reason why prices are increasing and will continue to do so

fliball123

The_Conductor wrote: »

Plenty of us have far more experience than Economics 101
The issue is not simply- supply and demand- which no-one can deny there is an excess of demand and a lack of supply. Supply and demand mean nothing- if people can't access finance- or indeed- if one of the major sectors of the market is being hounded out of the market by regulatory and taxation policy- as is the case.

The BTL market- was up to 45% of the entire market, not so long ago- now its not only dried up- but its adding supply to the market- something that would have been wholly inconceivable not so long ago.

BTL investors- aside from regulatory and taxation policy- are treated to harsher treatment when accessing finance- than are other participants in the market (who will in their own right argue that they are being treated to onerous conditions- notably the deposit requirements- but also the approval processes- which are ruling out disproportionately large numbers of purchasers.

Supply meanwhile is being artificially throttled- through a selfsame lack of finance for the construction industry (not to mention artificially high wages etc- which have not come down to reflect new realities).

Its a mess- but its not a mess wholly attributable to supply and demand issues.......

While you make a good point the reason why prices will stay on an upward trend is currently and for the foreseeable future the demand for housing will increase at a higher rate than the supply will be offered. Add in the rent prices going up which now makes a property more attractive for investment as well making it harder for people to rent means that all indicators are pushing demand way above what would be normal.....I think the gov would be mad to change the 80/20 rule as we will be back looking for tax payers money for mortgages and banks in no time.

Thargor

Not just us...Damning report exposes Europe's escalating housing crisis:

http://www.theguardian.com/world/2015/nov/19/damning-report-exposes-europes-escalating-housing-crisis

El_Dangeroso

beard_grower wrote: »

near indentical in size , amenities would be every bit as good in limerick , public servants in limerick earn the same as in galway , galway has a better reputation but im not sure the premium is justified

limerick is also cheaper than any commuter town in meath , kildare or wicklow , towns with populations one fifth of limerick in some cases

From personal experience the job market in Limerick is much much worse than Galway. The house prices follow the jobs.

I Am The Law

beard_grower wrote: »

house prices in limerick are about 30% lower than in galway , they only got off the bottom around fifteen months ago, beit for renting or buying , limerick is still dirt cheap

Could I get a link to the "dirt cheap" houses, I seem to have missed them for some reason.

I Am The Law

beard_grower wrote: »

compared to cork or galway , they are very cheap , you dont expect them to be as cheap as in roscommon or leitrim , they are also cheaper than naas , newbridge , navan , trim , bray , maynooth

despite being four times as large as most of those places

Average salary in ROI is now €32,500

Multiply that by 3.5 and add 10% for first time buyer = €125,125.

Could I see the "very cheap" houses please?

Alter_Ego

beard_grower wrote: »

maybe im missing something but when limerick city is cheaper for a three bed 1000 sqr foot semi detatched than towns in kildare and meath with populations of less than fifteen thousand , that appears like value to me

Maybe it has something to do with the fact that you can commute to Dublin from Kildare and Meath, and a lot of people do. There is an order of magnitude more jobs in Dublin than in Limerick

I Am The Law

beard_grower wrote: »

i dont think im allowed show links to individual houses , for all anyone knows , i could be trying to sell a house

my point is , while not doing as well as galway , public servants , people who work in large retailers , wages in limerick should be the same as in galway , its all relative at the end of the day

maybe im missing something but when limerick city is cheaper for a three bed 1000 sqr foot semi detatched than towns in kildare and meath with populations of less than fifteen thousand , that appears like value to me

Well feel free to PM links to "very cheap" houses, for now my experience is that the 3 beds you mentioned are extremely poor value compared to wages and I see people spending far too much on mediocre properties. I would question banks approving mortgages at these levels.

Villa05

Alter_Ego wrote: »

Maybe it has something to do with the fact that you can commute to Dublin from Kildare and Meath, and a lot of people do. There is an order of magnitude more jobs in Dublin than in Limerick

Limerick has more reasnobly priced accomodation because of the negative reputation (unreasnobly so) it gets.

Personally I would take a smaller mortgage over a long commute and jumbo mortgage

Disposable income in Limerick is above the national average, so for Quality of life Limerick is up there at the top

Cork, Kildare, Dublin and Limerick are the only counties where this income is higher than the State average.

http://businessetc.thejournal.ie/disposable-income-2-1428828-Apr2014/

Sleepy

I Am The Law wrote: »

Average salary in ROI is now €32,500

Multiply that by 3.5 and add 10% for first time buyer = €125,125.

Could I see the "very cheap" houses please?

That's an average individual, rather than household income.

With a mean of €52,949 and a median of €38,703 in 2011* the figures become rather different:

Off mean (average) income you'd get an average house price of €231,651 for a first time buyer at this income level (20% deposit, 3.5 times salary mortgage)

Off the median, you'd get a figure of €169,325 for a "normal" family home.

Of course it's more complicated than that as lending rules differ regarding how much of each source of income (two salaries, commission etc.) can be included in the 3.5 calculation

It's fair to say that average household income would have risen since 2011 but I'm not sure it would be to the extent that would consider property prices to be in line with the new lending rules yet.

I'd only really be familiar with prices in the Dublin area but it's fair to say that even with the larger figures I've calculated above that you would struggle to purchase a 3 bed home in any reasonable suburb of the city on the national average income levels. It'd be interesting to see the same calculations done with the average Dublin Income levels though (as they'd be significantly higher than most of the rest of the country).

*http://www.nerinstitute.net/download/pdf/neri_research_inbrief_income_dist_feb_2014.pdf

Caliden

Sleepy wrote: »

That's an average individual, rather than household income.

With a mean of €52,949 and a median of €38,703 in 2011* the figures become rather different:

Off mean (average) income you'd get an average house price of €231,651 for a first time buyer at this income level (20% deposit, 3.5 times salary mortgage)

Off the median, you'd get a figure of €169,325 for a "normal" family home.

Of course it's more complicated than that as lending rules differ regarding how much of each source of income (two salaries, commission etc.) can be included in the 3.5 calculation

It's fair to say that average household income would have risen since 2011 but I'm not sure it would be to the extent that would consider property prices to be in line with the new lending rules yet.

I'd only really be familiar with prices in the Dublin area but it's fair to say that even with the larger figures I've calculated above that you would struggle to purchase a 3 bed home in any reasonable suburb of the city on the national average income levels. It'd be interesting to see the same calculations done with the average Dublin Income levels though (as they'd be significantly higher than most of the rest of the country).

*http://www.nerinstitute.net/download/pdf/neri_research_inbrief_income_dist_feb_2014.pdf

So single people can never own their own home?

Caliden

Caliden wrote: »

So single people can never own their own home?

If they can afford it they could.

NinjaTruncs

Caliden wrote: »

So single people can never own their own home?

He didn't say that, however single people will need to compete with many couples who are looking to by a house, and as such the couples will dictate the value of the property more so than the single person will.

The_Conductor

Sleepy wrote: »

It's fair to say that average household income would have risen since 2011 but I'm not sure it would be to the extent that would consider property prices to be in line with the new lending rules yet.

Not necessarily a fair or reasonable assumption.
Look at the public sector where in the region of 400,000 are employed all told- they've had cuts imposed- some of which kicked in after 2011. Cuts are 20-25% for this sector (net).

Sleepy

Caliden wrote: »

So single people can never own their own home?

I would assume single people living on their own would constitute a "household" in those calculations, just as single income families would.

Household make-up would certainly be an interesting additional dimension to pivot that data by. I'd assume a hierarchy along the following lines exists:

Dual Income Couple with no Children.
Dual Income Couple with Children.
Single Income Household with no Children.
Single Income Couple with Children.
Single Income Mother / Father with Children.

The argument could be made that the housing needs of the demographics are different though: apartments being more suitable for households with no kids for example.

I Am The Law

Ok lets look at it another way,
DAFT Q3 Average Asking Price for Limerick City = €143,929
Minus 10% Deposit = €129,536
Divided by 3.5 = €37010 needed as household gross income before you get into a bidding war!

johnp001

Sleepy wrote: »

It's fair to say that average household income would have risen since 2011 but I'm not sure it would be to the extent that would consider property prices to be in line with the new lending rules yet.

The_Conductor wrote: »

Not necessarily a fair or reasonable assumption.
Look at the public sector where in the region of 400,000 are employed all told- they've had cuts imposed- some of which kicked in after 2011. Cuts are 20-25% for this sector (net).

Income has risen by 0.5% since 2011 (by comparing the figures for the 4 quarters of 2011 against the most recent 4 quarters in the CSO earnings statistics Earnings and Labour Costs Quarterly

The_Conductor

johnp001 wrote: »

Income has risen by 0.5% since 2011 (by comparing the figures for the 4 quarters of 2011 against the most recent 4 quarters in the CSO earnings statistics Earnings and Labour Costs Quarterly

Have a look towards the bottom of the report you've quoted:

5 years to Q2 2015- average hourly wages down 0.5%
Average weekly paid hours down from 32.9 to 31.9
- and the figures about public sector pay- which accounts for 400,000 odd of the workforce- are down 1.9% (not factoring the pension levy of 2009 into the equation- which obviously is a further reduction in NET pay (I did say 'net' above- I don't actually think there was a reduction in gross).

Also- the figures for everyone- are gross figures- which don't take into account PRSI, USC and other deductions- on top of tax- I don't recollect any of these letting up in the last 5 years- and they're not quantified in the CSO figures (other than a blurb at the bottom- admitting they're not quantified- and stating that the public sector pay being quoted doesn't factor the 2009 levies- or the longer standard working week- into the equation.

I'm not really sure why you're specifically looking at 2011 figures- the CSO themselves- graph the whole lot on a 5 year rolling basis- in the report you've linked to- its actually harder to try to extrapolate from their graphs and figures for different time frames (as you are obviously using a different start point).

The increases you've highlighted- are very sectoral (i.e. great if you work in IT- tough titties if you work in pretty much any other sector)- I don't think using a mean which features a sector that has had a recent 16 and 23% increase in its rates- is a good idea- or fair on the other sectors- as its effects singlehandedly mask the significantly poorer performance (of pretty much every other sector). E.g. looking at the aforementioned public sector pay- year-on-year its down 1.1% to Q2 2015 (according to your CSO tables).

Its yet another opportunity to regurgitate that old Churchill quotation- about lies, lies and damn statistics...........